Poste Italiane’s overall full year 2024 revenues grew 5.0% y-o-y to €12,589m and net profit was up 4.1% to €2,013m. Much of the Italian postal operator’s business is in banking, telecoms and insurance. However still the largest division, accounting for just over 30% of its revenues, the Mail, Parcels and Distribution segment achieved a reduction in net losses of 91.7% y-o-y to €88m on revenue that grew 2.6% to €3,843m.
Matteo del Fante, Poste Italiane’s CEO said, “Over the past seven years we have more than mitigated lower revenues in structural decline such as physical mail with €2bn additional revenues from our fast-growing parcels and payment businesses, significantly higher investment portfolio revenues and resilient insurance business.”
Mail Parcel and Distribution parcel volumes grow strongly
Where mail volumes fell 7.9% y-o-y to 2,107m pieces, parcel volumes grew 20.4% to 308m pieces. According to Poste Italiane, Mail revenues grew 2.4% y-o-y to €2,120m supported by repricing and favourable business mix. Parcel volumes however were the key driver to Parcel & Logistics revenue that grew 13.2% to €1,586m.
Poste Italiane doesn’t offer a granular breakdown of the profitability of its sub-segments but it is easy to assume that the majority of the segment’s losses came from the Mail subsegment, based on the experience of other postal operators. The significant fall in losses y-o-y may well be due to strong parcel volume growth.
The Mail, Parcels and Distribution (MPD) division figures strongly in “The Connecting Platform” 2024-2028 Poste Italiane strategy in which the postal operator is one year in. When the strategy las launched, del Fante said, “We… [have] established ourselves as the largest phygital (sic) platform in Italy, thriving on the integration of multiple touchpoint and creating an omnichannel ecosystem where each portion of the platform complements the other.”
Concerning MPD, this will have, according to the strategy announcement, “A new commercial service model that aims to maximise the value of the customer relationship and a logistical transformation to build a future-oriented technological network.” By 2028 the postal operator has a number of objectives for MPD including
– Almost doubling its warehouse footprint to 400,000 sqm
– 4-hour delivery options in certain metropolitan centres
– Increase its pick-up/drop-off (PUDO) network to 40,000 sites from 28,000 in 2023
– Finally, to set up a real estate joint venture with a specialised real estate operator to meet increasing demand for logistics spaces.
Such activities may well improve the profitability of the segment.
Net profit guidance with lower losses at MPD?
Looking ahead to 2025, del Fante said “We remain focused on delivering sustainable revenue and profit growth, with a €2.1bn net profit guidance,” adding, “Our ability to deliver [such] growth in any environment confirms the strength of our business model and long-term vision.” This might well come from even further reduction of losses in its MPD division as much as improved performance from its other financial and telecoms related businesses.
Author: Richard Shrubb
Source: Ti Insight
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